Health Insurance Premium Deduction

[Burke]

Except, in this case, it was not a group plan. It was an individual contract purchased by the TP's.

[TAX4US]

One I just saw was a h and w with their insurance in boxes 1,3,5. S Corp although has 2 other employees. 1 has his own ins , the other employee no ins at all. Is it a safe assumption that this does not qualify for the above the line deduction?

[TaxGuyBill]

Code § 9831(a)(2) and ERISA § 732(a), the market reforms do not apply to a group health plan that has fewer than two participants who are current employees on the first day of the plan year

After thinking about it, aren't there ERISA rules for OFFERING insurance? Otherwise, a company could just choose to offer it to select persons, which seems like it would be discrimination that would violate ERISA. Maybe I'll need to read some more of the ERISA rules to see if I can find something.

One I just saw was a h and w with their insurance in boxes 1,3,5. S Corp although has 2 other employees. 1 has his own ins , the other employee no ins at all. Is it a safe assumption that this does not qualify for the above the line deduction?

Why is the insurance in all 3 boxes? That makes it sound like it's NOT an insurance reimbursement. It is just increased wages, which would mean no SEHI deduction.

[TAX4US]

Not sure why it was in all three boxes. The only way I figured it out was that H & W get paid a flat salary and it did not match what was on w-2. No bonuses for either. Showed me a pay stub from CO and was on the last one for 2014. I be confused? Could be error on bookkeeper's part. Don't know.

[CVTax]

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/S-Corporation-Compensation-and-Medical-Insurance-Issues

Health Insurance Purchased in Name of Shareholder
The insurance laws in some states do not allow a corporation to purchase group health insurance when the corporation only has one employee. Therefore, if the shareholder was the sole corporate employee, the shareholder had to purchase his health insurance in his own name.
The IRS issued Notice 2008-1 which ruled that under certain situations the shareholder would be allowed an above-the-line deduction even if the health insurance policy was purchased in the name of the shareholder. Notice 2008-1 provided four examples, three of the examples had the shareholder purchasing the health insurance and the other example had the S corporation purchasing the health insurance.
The Notice held that if the shareholder purchased the health insurance in his own name and paid for it with his own funds the shareholder would not be allowed an above-the-line deduction. On the other hand, if the shareholder purchased the health insurance in his own name but the S corporation either directly paid for the health insurance or reimbursed the shareholder for the health insurance and also included the premium payment in the shareholder’s W-2, the shareholder would be allowed an above-the-line deduction.
The bottom line is that in order for a shareholder to claim an above-the-line deduction, the health insurance premiums had to be paid by the S corporation and had to be included in the shareholder’s W-2.